This article first appeared in The Edge Financial Daily on January 29, 2020
Gabungan AQRS Bhd
(Jan 28, RM1.08)
Maintain buy with an unchanged target price of RM1.65: Gabungan AQRS Bhd and Suria Capital Holdings Bhd have inked an agreement to vary certain terms of their joint-venture agreement (JVA).
To recap, the proposed JV between Gabungan AQRS and Suria Capital was to develop a 6.28-acre (254.14ha) land owned by the latter forming part of a 23.25-acre master land in Jalan Tanjung Lipat, Kota Kinabalu, Sabah for commercially developing the development land into One Jesselton Waterfront — a mixed development.
As a result of the agreement, Suria Capital’s entitlement pursuant to the JVA has been revised upwards from the current 18% to 20% of the minimum net saleable value of RM1.1 billion. Suria Capital’s increased entitlement is attributable to an appreciated value of land bank within Kota Kinabalu’s central business district.
The rising trend in value appreciation will result in higher earnings from the One Jesselton development and also act as a key driver of the group’s cash flow. Currently, Gabungan AQRS is working closely with international retail planners and leasing professionals to efficiently design the One Jesselton Mall’s internal layout.
The waterfront condominium and serviced residence have also progressed to marketing and a preview launching stage with Tera Realty appointed the exclusive international marketing agent. Gabungan AQRS and Tera Realty will collaborate and begin a roadshow marketing in the third quarter of financial year 2020 in Shanghai. They are also exploring extending the roadshow to cities in South Korea, Japan and Taiwan at year end. — MIDF Research, Jan 28